Prefer to talk in person? Find a mortgage specialist on Zillow
Profile picture for swampwiz

How to get a loan with only IRA assets

I am retired early and not 59-1/2 years old, with virtually no debt.

I have a large IRA (both Roth & traditional) and no other income.  Some of the Roth is considered contribution (i.e., actual contribution or a Roth conversion over 5 years) with other Roth conversion less than 5 years, and gains on the Roth.

I have been living cheaply abroad, only taking contribution distributions from my Roth.  I would like to buy a home in the USA, but am unsure how to use the fact that I have this IRA to prove my income ability to buy a home - I could easily take another $1K per month to pay the note on the home.  It seems that all loan officers want to see a job or a pension, but all I have is my IRA, and I haven't been taking any taxable distributions, so my income is very low (I have been doing Roth conversions up to the extent that I am in the 0% tax bracket.)

I suppose I could just take a taxable early distribution from either the Roth or traditional IRA and buy the home with that, but I would prefer to leave that in the retirement account as an investment and simply pay a low interest rate loan - to say nothing of having as much cash inside of the IRA, to make confiscation in a possible future Chapter 7 bankruptcy as low a risk as possible (i.e., any equity in the home above the exemption amount would be confiscated in a Chapter 7 filing.)

So how do I go about doing this?  I have the assets to make the payments, but the standard way that banks operate - especially these days after the crisis - don't seem to allow folks like me who are credit-worthy to get loans.  I would have no problem coming up with 20 or 25% of the price of the home as a downpayment.
  • April 22 2012 - Bella Vista
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (1)

It is possible to use income from IRA monthly distribution to qualify but value of IRA(s) would need to support 36 months + of that monthly distribution. This is a special FNMA program so If you need more info contact me through my profile.
  • April 22 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.